Living most of my life in Auckland, I am very familiar with the variability of the Auckland motorway system. Generally speaking, if you’ve got a long distance to cover the motorway is the best bet. Occasionally you will spot the flicker of brake lights ahead and you know that things might slow down for a while, but once you get passed that slow spot, you’ll be back on track.

In very heavy traffic, we can be tempted to take the off-ramp, use the slower suburban roads for a while, and re-join the motorway when we think things might have improved. Occasionally this strategy might work, but if we were to hit the off-ramp every time we saw the flicker of brake lights ahead, or got the slightest inkling that there might be delays, we would be on and off the motorway every other exit. Most of the time, staying on the motorway is the best strategy, even with heavy traffic.

It’s the same with investing. Research and history shows us that the fastest and best way to reach our financial goals is to include an investment in shares. While there can be volatility, or short periods of time when other asset classes (e.g. fixed interest) can outperform shares, over the long term, shares outperform all other major asset classes. Staying invested in the market and accepting that sometimes we might feel we would be better off taking a different route is better than trying to time our entries and exits from the market. If we tried to time the market and got out or in every time we saw the flicker of brake lights ahead, we would risk exiting when prices are slightly down, and then buying back into the market after prices have recovered. We would lose ground every time.

Continuing the analogy, we reduce risk by diversifying our clients’ portfolios, ensuring we are not putting all our eggs in one basket, or in one vehicle on the motorway. We are investing in many different styles of funds and in a wide range of companies across several industries, markets and countries. Furthermore, depending on each client’s risk profile, we only have a portion of any portfolio invested in shares. The balance of the portfolio is already invested in slower moving, fixed interest investments.

We have started to see the flicker of brake lights ahead in international share markets. There are concerns over the potential exit of Britain from the Euro (which are subsiding) and uncertainty over the US elections. This is likely to mean that we will enter a period of falling share market prices. While we could lurch to the left and take the next exit, we believe that this would be a potentially costly mistake. Our advice is to expect that there will be some delays ahead, but stick to the strategy that will provide the best long term outcome.

As always, if you have any questions, please give your adviser a call.

This amazing event was held in Wellington this weekend. Over 1200 people entertained thousands over four nights. I went on Friday night, not expecting much, as I had no idea what it was or why it was special. I was so proud to be a kiwi, the rendition of Pokarekare Ana was spectacular, and here is a link to video to prove it (although it was much more powerful to be there with the audience humming the tune).

New Zealand Fund Manager of the Year 2016 – Harbour Asset Management
Harbour is an outstanding steward of its investors’ capital and the well-deserved winner of Morningstar’s overall award for New Zealand funds management excellence. Originally established as a domestic equities house, the firm has expanded its offering, which now encompasses fixed interest and global capabilities, in
a sensible and well-structured manner. Performance across all asset classes was top-notch in 2015, with investors benefitting from shrewd security selection and well-judged portfolio positioning in difficult market conditions.

Fund Manager of the Year: Fixed Interest Category, New Zealand 2016 – Harbour Asset Management
Harbour’s Christian Hawkesby and Mark Brown have done an exceptional job at developing the firm’s fixed interest capability since joining forces in 2011. Their sound investment process, backed by detailed economic research and modelling, has resulted in a noteworthy track record to date. Investors looking to diversify their portfolio by including fixed interest exposure need look no further than Harbour.

THIS IS NOT INVESTMENT ADVICE.PLEASE CONSULT WITH YOUR FINANCIAL ADVISER FOR PERSONALIZED ADVICE THAT IS APPROPRIATE FOR YOU.

ANZ Investments was last night named International Equities Manager of the year in the 2016 Morningstar Awards.

This is great recognition for their investment team, who were also finalists for Morningstar Fund Manager of the Year and Morningstar KiwiSaver Manager of the Year.

ANZ Investments is the largest fund management company in New Zealand with over $24 billion in Funds Under Management.

Beyond the annual awards, their investment funds are consistently receiving top ratings for investment performance in Morningstar’s quarterly reports.

*Morningstar award winners are selected based on sound methodologies that emphasise outperformance over one, three, and five-year periods. The analyst-driven Fund Manager of the Year awards recognise managers who have not only achieved impressive returns, but also been strong stewards of investors’ money.

Mint Wins Morningstar Fund Manager of the Year Award
for Domestic Equities

Mint Asset Management has taken out the Fund Manager of the Year award for Domestic Equities at the 2016 Morningstar Fund Manager of the Year awards.

Rebecca Thomas, CEO of Mint Asset Management, said “There are nine years of collective toil behind this win. We are delighted with the award, which is a testament to the rigorous investment process and highly experienced team we have at Mint.”

Tim Murphy, Morningstar Australasia’s director of manager research, said: “The winners of the New Zealand Morningstar Awards have all shown themselves to be first-class stewards of investor capital. The quality of their people, process, parent, price and performance demonstrates their commitment to investors.”

I often feel that the opening line to most financial commentators should read like the opening line to a fairy tale, or a nightmare. They tell stories about a future that hasn’t happened and make up stories that sound like the markets (read share markets) are driven by computers and not humans.

For the person who is just trying to earn a living, save a bit for retirement and generally get along with others the whole idea that there is many options for their savings is usually overwhelming. This is where we come in, as advisers we understand the majority of options and choose the right one for you. It is not about product, it is about the best solution for you, which may be a product or a service, or nothing at all, you are sorted.

Right now there is a new product on the market, called Lifetime Retirement Income. You may remember annuities, they pay an income to you after you had saved for years to gain a lump sum for them to take the income from. I have seen the conditions of some of these policies, and they are scary. This is different.

When I think of local government I always think taxes and resource consent. But, if this all it is, why aren’t these functions managed our nation’s capital?

These questions and more are answered in the latest offering from the NZ Initiative,
“The Local Formula Myths, Facts & Legends”

Here is a short excerpt from the Foreward of the report by the head of the NZ Initiative, Dr Eric Crampton.

Krupp and Wilkinson began this work this year so we could start better to understand why local government pursues policies that, to an outside observer, seem utterly daft. Why set zoning rules that ruin housing affordability? Why run consenting processes that seem designed to give every objector the power to veto while putting little or no weight on the voices of those who could have lived in the new apartments or subdivisions? Even simple things, like consenting for a gravel pit, becomes tied down in difficult processes, as Krupp’s report last year on New Zealand’s mineral estate demonstrated.
In short, why does local government sometimes behave as though growth is something to be prevented or contained rather than something to be welcomed?

The Initiative’s new report canvasses some potential explanations but the fundamental problem seems to be political economy. When local government is potentially financially liable for any flaws in buildings that they consent, but sees little upside from faster consenting processes, we should not be surprised that things move slowly. Local political pressures mean councillors supporting new development risk being voted out of office before new residents can move in. Consenting processes empowering Not In My Back Yard objections entrench the status quo and prevent growth. As a bottom line, when local councils bear most of the costs of new development, but the benefits largely flow through to central government, we might reverse the usual conclusions about local government.If anything, it is perhaps surprising that local councils function as well as they do, given their constraints.
This report does not develop policy conclusions… But a report developed in parallel with this one pointed to a process for unblocking regional growth. As Krupp and Wilkinson became increasingly convinced that political economy rather than current financial constraints were the fundamental drivers of some councils’ reluctance to embrace growth, Khyaati Acharya and I proposed regionally based policy reform as potential solution.

Abstracting from the political constraint, restoring housing affordability is a solved problem: allow greater density within our cities’ centres; abolish rules like minimum apartment sizes and minimum parking requirements that push up housing costs;and end the rules that stop cities from expanding at the fringes.

But abstracting from the political constraint is too much like the proverbial economist’s assuming the existence of the necessary can-opener. The more interesting remaining problem is how to change the underlying political economy so that both local and central government can embrace
growth and change.

BUT, some issues we are currently facing (such as oil price drops and stock market drops) are not a surprise.

The oil price drop is no surprise to most analysts, or it’s impact on the global economy. The big picture is that it could be good for the masses. Reducing living costs, encouraging spending in other areas, boosting other parts of the economy.

When these times of uncertainty come (and there havebeen enough of them since 2008). What do you do? Who do you listen to?

That is where a good investment adviser comes in. We help you through the questions and media headlines to the heart of what is going on and what you can do about it.

There will always be uncertainty, that much is certain.

If you are having trouble sleeping due to fretting about your investments, you have a few choices:

Do nothing

Find a financial adviser you trust to talk it over with

Talk to your friends who read the same news you do

Talk to someone who looks at the big picture and has your best interests first and foremost in their mind. This should be the financial adviser you trust)

None of us can change the past, but we can change the present to have a positive impact on our future.

Don’t trust everything you read or hear in the media. Try to understand the angle andmotivation of the person who wrote the article instead. As the saying goes, it’s not news unless it is bad news.

The fireworks go off, the parties happen, the music plays and for one moment everything seems right with the world, so we make impossible resolutions…

Now I don’t want bring anyone down, but those resolutions we make are only followed up by 20% of us (I am told, I personally believe it is much lower). So what about the rest of us? Well, I have found a way to ditch the resolutions and have a year of positive change.

How do I do this? I choose OneWord, the book if you want the full process is My One Word by Mike Ashcraft & Rachel Olsen. Here is the basic process:

Write down every character trait that you want to be better at, honestly, write everything down that comes to mind.

Choose 10 to focus on, the ones that resonate with you best

Research those 10 with dictionary definitions etc

Choose ONE to focus on for the year, write it on your mirror, on your wall, get books out of the library that discuss the topic, talk to your friends about how they think you are in this area, and write a diary documenting your journey.

Last year my word was Intentional, for me it was about being intentional with my actions, trying to stop doing things “because I had always done it that way”, saying intentional yes to questions, as well as intentional no.

This is the third year of doing this, along with friends who now do it too. I haven’t found my word for this year yet but I am getting close. Also, small warning, the first time you try this it can seem daunting, but my best advice is “just go with your gut”. If it resonates stick with it, there is always next year for the others.